Procurement and retention of talent – the challenges in SA
Global recruitment and talent retention is changing globally, not just in SA. According to Manpower, 46% of senior human resource managers surveyed in the latest global annual survey said that their talent gap was making it harder for their organization to implement its business strategy. Only 27% said that they had the talent they needed.
Alan Low of Purchasing Index discusses the challenges South Africa faces in this month’s SmartProcurement.
Increasing growth in South Africa, a dysfunctional public education system and other factors have all contributed to a lack of skills which is exacerbated by the imminent retirement of a generation of experienced workers in many disciplines from public administration, through the “trades” (plumbers, electricians, boiler makers, etc.), to the proverbial nuclear scientists.
Business has a natural tendency to want to employ experienced staff. As Mark Zuckerberg of FaceBook recently remarked, experienced employees are “not just a little better than someone who is pretty good; they are 100 times better.” As companies search through the diminishing talent base, the salaries of those employees continue to rise and the length of employment tends to decrease. When an experienced employee leaves, the cost of employing a replacement can increase dramatically, owing to
• rising remuneration packages to attract candidates away from their current employer;
• higher agency or head-hunter fees;
• more internal effort and cost to interview candidates and decide on the final one;
• lost productivity owing to unfilled vacancies for months or even years; and
• Lost productivity while the new employee gets to understand the organisation culture, structure and work practices.
These changes often result in fewer people doing more work, leading to higher levels of stress and job dissatisfaction and so to higher staff turnover.
A prime example of all of the above is in procurement, where the lack of experienced procurement people (not just in South Africa) has coincided with a new focus by most organizations on controlling the value they get from the money they spend with suppliers. The ensuing competition for a very small skills pool has led to the increasing use of search companies to entice middle managers away from their current employer, a dramatic increase in remuneration packages over the last 10 years and a higher procurement staff turnover.
A growing number of employees are electing for a more balanced lifestyle, opting for fewer working hours in return for a lower remuneration. Organizations are also looking at ways to make the work environment more satisfying, in order to retain staff and keep them motivated. Companies, such as Intuit and Google, find they get greater commitment and productivity from their staff by letting them use up to 20% of their work time on whatever they want!
Other areas aimed at attracting and retaining talent include:
• Keeping databases of prospective candidates, even when they are not hiring, to refer to when they require new skills.
• Offering greater flexi-time and work-from-home arrangements (i.e. for working parents).
• Using information and technology to shorten the recruitment process and cost, and understand employment patterns.
• Re-training graduates and staff with inappropriate or new skills. (In India corporations in industries such as retail and IT have set up colleges to train or retrain staff with the required skills).
• Understanding what motivates employees and what they find satisfying in their work.
• Monitoring the career paths of employees more closely and involving them in planning their future (which may include such things as sabbaticals).
• Networking with other organisations in different industry sectors and countries to see what they are doing and what works and what doesn’t.
• Finding ways to use the skills base of such groups as the over 60s and mothers with young children.
• Developing in-house or outsourced mentoring skills to assist staff get the necessary experience more quickly.
As the shortage of skills increases in South Africa, local organisations are going to have to become more and more innovative in the ways they attract and retain talent in order to meet their growth strategies. The sharing of relevant, structured information through a network of diverse organisations has been proven to add substantial value to its participants.
Submitted by Alan Low, CEO of Purchasing Index, an organisation offering analysis and benchmarking services to South African organisations. If you wish to contact Alan or discuss these issues further his email address is email@example.com.